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How Do Credit Card Miles Work? Key Questions Answered

ow Do Credit Card Miles Work?

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Many credit cards offer rewards to encourage people to use them to make purchases. While there are many different types of reward credit cards, the kind people probably understand least is travel rewards credit cards that award points or miles for each purchase.

What Are Credit Card Miles?

A credit card mile is the same as a point. Typically, card users get one mile for each dollar they spend, and a mile is worth a penny toward airline travel, although miles can have different values and can sometimes be used for other kinds of travel expenses like hotels.

The basic form of credit card miles work very much the same way other rewards do, but if you know all the particulars of different travel rewards programs, you can get more for your money and sometimes find really good deals on travel just by using your credit card to buy the things you need and pay for the various expenses of your life.

Travel rewards credit cards don’t make too much sense for consumers unless they travel enough to use the rewards, but they can be a way to save money on airfare and hotels if you do travel from time to time, and can lessen the sticker shock of flying or enable you to afford a first class or business class seat instead of coach in some cases.

Credit card
There are many different ways to get credit card miles that help with travel costs.

What Kind of Travel Rewards Card Should I Get?

There are two main types of travel rewards cards. One type is a card issued by a specific airline, which typically only offers “frequent flyer” miles for that airline or a few select others that they partner with. These types of cards can be useful if you always travel with the same airline, but are limited compared to other cards, which can be used with other airlines and often on hotels as well.

One major limitation of frequent flyer miles is that you usually have to have enough miles to cover the cost of the entire plane ticket.

Some generic travel rewards cards offer fixed rewards with no limitations on how they can be used, while others offer the option to transfer the points to certain airline reward programs, which do have limitations on how they can be used.

While transferable points may seem to be a less attractive option, some specific rewards programs into which points can be transferred can offer much better deals on certain flights if you know the program and how it works. Some of the best deals can occur on first class and business class tickets, which may cost up to 10 times as much as a coach ticket but only require a few more thousand points, in many cases.

One last kind of travel rewards credit card is a co-branded card, such as a Visa/AAA card. These cards have their own requirements and limitations, but many offer perks like lounge access, free checked bags, or free upgrades with certain spending levels.

How Do You Earn Credit Card Miles?

Frequent travelers who like to fly first class or business class may save the most money by having an airline-specific card or a card with transferable points, which often offer perks or better deals that can come in handy. If you travel rarely or less than once a year, however, airline reward program points might expire before you can use them, so a fixed-point generic card might be your best bet.

For those who have trouble getting enough points to earn entirely free flights, a fixed-point card also has another advantage. Because these cards translate to cash rewards on flights and hotels, you can use them for a partial discount on travel expenses even when you don’t have enough in rewards for a completely free flight or hotel room.

If you already have miles or points with one fixed-point card but find out that another type is best suited for the way you travel, some cards allow you to transfer points to another card or program so you can take the best advantage of your rewards no matter how many points you have.

Traveling is expensive, so any way to save money on flights and hotels helps to make it more affordable and may put a trip within reach that might not be otherwise. While traveling may not have the tangible permanence of other things you could purchase, it does something not many tangible items can do–travel creates priceless memories that you can carry with you for the rest of your life.

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